ECU prof studies value of beach property

(Sept. 20, 1993)
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A study of beach property values by the East Carolina University School of Business has confirmed what most land developers already know too well: People will pay more to be near the water. But, it’s not just the proximity to the water that determines the value of coastal property. A view of the ocean will fetch more dollars too. And the price is also affected by the amount of beach frontage, by the value of nearby properties and by the size and shape of the lot. ECU business professors Margaret Capen, David Chatterjee and Paul Wertheim, and graduate student Jon Jividen collected data at Land’s End, a residential development at Emerald Isle, N.C. Their findings were published in “Real Estate Appraiser,” a national journal. In their research, the authors examined nine characteristics they believed would affect property value. These consisted of average value of adjoining lots, lot size, lot shape, distance from the beach, view of the ocean, location on a pond, type of access street (through street or cul-de-sac), amount of beach frontage and distance from the development’s closest edge. Five of the characteristics were found to be significantly related to prices. They were; distance to the water, the amount of beach frontage, ocean view, regularity in the shape of the lot and the value of neighboring lots. The researchers said their study offers practical uses for builders, investors, and appraisers. Builders, they said, would benefit by knowing those characteristics used in the valuation of lots by developers. Investors could use the results in judging the relative value of alternative beach properties. Appraisers can apply the findings to determine which tangible qualities of coastal lots have measurable impact on market value.